PERTH (miningweekly.com) – Diversified energy group Linc Energy on Wednesday announced that it would divest or de-merge its coal division, New Emerald Coal, once it has listed on the Singapore Exchange (SGX).

The New Emerald Coal assets include the Blair Athol mine, which was acquired from mining giant Rio Tinto in October.

Linc is in the midst of a major shake-up, with the company moving its underground coal gasification operations from Australia to Asia, and delisting from the ASX, in favour of a listing on the SGX.

The divestment of its coal division, which was valued at about A$440-million and has a Joint Ore Reserves Committee-compliant resource of 344.2-million tonnes, was in line with the company’s strategy of focusing on its core energy business of conventional and unconventional oil, gas, shale gas and underground coal gasification, while unlocking value for shareholders.

“The current move to divest and de-merge the coal division presents exciting prospects for our shareholders. It’s worth noting that the upgrade in coal resource at the Blair Athol mine should allow for a ten-year mine life, at a production rate of three-million tonnes a year,” said Linc CEO and MD Peter Bond.

He noted that New Emerald Coal was well positioned to become a leading coal production company through a solid development plan, and a focus on purchasing low-cost coal assets with immediate production capabilities.

The divestment or demerger was expected to take place in 2014.

Bond told Mining Weekly Online that the company had been approached by a number of prospective buyers, and negotiations were ongoing. He could not comment on a final price for the division, but stated that New Emerald Coal was working to add value to the assets.

If the demerger route was followed, New Emerald Coal would be spun-out as a separately listed company, with Bond saying that the most likely destination for this listing would be the SGX, to keep with Linc’s move to this bourse.

Meanwhile, New Emerald Coal MD and CEO Michael Mapp said on Wednesday that the company was actively negotiating the acquisition of further coal assets, following its success in purchasing the Blair Athol project, and was looking to add more early coal production opportunities to the new coal company’s portfolio.

“We have an experienced and diverse management team with operational and turnaround experience in both underground and opencut operations. Our team at New Emerald coal has been working hard to realise this divestment and de-merger, and we now plan to move forward with developing a strong and dynamic business,” Mapp said.

The Blair Athol mine and the Teresa project, in Queensland have a combine resource of 344.2-million tonnes and the Pentland opencut and Dalby projects have respective resources of 266-million tonnes and 146-million tonnes.